AdTech Insider: What are vanity metrics and why are they misleading?
Each month we take a look at an emerging topic in ad tech. This month: vanity metrics, ad fraud and why BLADE is better!
Vanity metrics are a hot topic of late and can be applied to any data point that makes a product, service, or personality appear successful. For example, followers on a social media account; Subscribers to an email list; Active daily users of an app; Click through rate of an ad campaign, and more.
When only one data point is measured, it’s easy to fraudulently inflate that metric quickly and cheaply to increase the perceived value of the account it’s attached to.
In our previous blog post, we explained what a Click Through Rate is:
CTR stands for Click Through Rate. There are a few different data points that are measured in online advertising and this is one of them.
An ad impression is when an ad is loaded and the end user has viewed the ad. This is tracked as one impression in the ad campaigns total number of impressions.
When the user clicks the ad, this is tracked as one click in the ad campaigns “CTR” measurement. (BLADE Advertiser Case Study)
It’s easy to see why a high CTR is desirable for a successful ad campaign — but what if the CTR is full of bot traffic? Well, then you’re paying for a vanity metric that isn’t translating into your desired outcome (purchases, signups, etc.)
This is common with social media influencers. If their enormous follower counts are made up of fake accounts that they’ve purchased, when they publish a paid post only the real followers can take the desired action. The low actions due to the low amount of real followers proves the low quality of the account and thus, that a paid post from them has a lower value than an account with real followers.
This is also a common practice with digital ad fraud through “domain spoofing”. Domain spoofing is when a bad actor sets up a domain name similar to that of a popular website (ie. nytimes.com vs nytines.com) and pushes a large amount of fraudulent bot traffic to the site. When the advertisers’ ad is shown on the spoofed domain, they see a large volume of traffic which is normal for the real site — but is nothing but bot traffic on the fake site. Then, the bad actor collects the publisher payout from their fraudulent domain (which is priced very high because the advertiser thought they were getting nytimes.com traffic) and they’ve successfully stolen ad dollars from the advertiser. The advertiser gets zero ROI on their ad spend because there were only bots viewing their ad and no real people.
So how do you make sure you’re not measuring vanity metrics?
When measuring the success of an ad campaign, advertisers have been shown high CTR’s as proof of success — even when it didn’t lead to increased purchases, a sure sign of fraudulent bot activity. When advertising on BLADE, advertisers see higher CTR than traditional display advertising, proving the high quality of BLADE’s users.
While our impressions have grown as the number of users has increased, our CTR has remained both consistent and higher than traditional crypto display advertising. This is tough to do, as most networks that see traffic growth, don’t necessarily see the growth in clicks and conversions. (BLADE Advertiser Case Study)
It’s important to track several data points to get a real view of how your advertising campaign is performing. Your impressions, location of the ads, CTR, and then purchases — and any other data points — will give you a wholistic view of how your ads are performing.
Vanity metrics for other measures of success
It’s important to look at a variety of metrics that will indicate the success of a project. For example, with BLADE it is not just active users that indicate success, but the amount of KYC verified users, the CTR of campaigns and the CPM that advertisers pay for their campaigns.
With all of these different data points, we can see how each part of the BLADE ecosystem supports the success of the overall project and the ADB token. With high quality users who are KYC verified and who are interested in the advertising campaigns (meaning they take actions like clicking and purchasing), we can sell CPM’s at a higher cost to advertisers. This in turn provides bigger ADB rewards for users (higher CPM means higher rewards per ad view!) and also drives the utility of the ADB token. You can see how all of these factors work together to benefit everyone using and holding the ADB token.
That’s it for this month’s AdTech Insider. Check out last month’s topic: Privacy and a cookie-less future.
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